Cobalt prices are soaring once again, reaching their highest level since 2022, as fresh export restrictions in the Democratic Republic of the Congo (DRC) threaten to choke global supply. The African nation, which produces roughly three-quarters of the world’s cobalt, imposed a ban on shipments in February and now plans to replace it with a quota system that could plunge the market into deficit as soon as next year. The announcement has sent prices of both cobalt hydroxide and refined metal climbing more than 20% in just weeks, according to Bloomberg.
The new quota regime, set to begin on October 16, has shaken confidence in the DRC’s reliability as the world’s cobalt hub. Under the plan, export allowances will be distributed on a pro-rata basis, calculated from each company’s average shipments over the past three years. This could mean a dramatic reduction in supply. CMOC Group Ltd., which operates massive cobalt and copper mines in the country, will be allowed to export about 31,200 tons in 2026 — just 27% of its 2024 output. Glencore Plc and Eurasian Resources Group Sarl have been granted 22% and 12% of total quotas, respectively. Analysts at Citigroup warned that while CMOC may benefit from higher prices, the quotas are significantly lower than expected, threatening production plans across the industry.
The market response has been swift and volatile. On Monday, cobalt traded up about 2% on China’s Wuxi Stainless Steel Exchange, while CMOC shares tumbled as much as 7.2% in Shanghai. Meanwhile, rival producers such as Zhejiang Huayou Cobalt Co. saw their stocks rise more than 2% on expectations of tighter supply and stronger prices.
Cobalt’s importance in global industry — from aircraft components to household paints — is overshadowed by its critical role in batteries for electric vehicles. China, the world’s largest EV market, also dominates the refining of the metal. The DRC’s curbs come after a steep production surge had driven cobalt prices to collapse in 2023, briefly dipping below $10 per pound for the first time since 2015. Prices have now nearly doubled, with hydroxide tripling in value. Analysts at Macquarie Group Ltd. predict that if the quotas are fully enforced, the market could run out of cobalt by mid-2026, pushing prices above the highs seen in the last bull run.
The ripple effects of Congo’s restrictions are already visible in global trade flows. Chinese imports of intermediate cobalt materials, such as hydroxide, plunged over 90% in August compared with a year earlier, according to customs data cited by Bloomberg. The shortage has forced refiners to scramble for alternatives, with Indonesia — the second-largest producer — poised to benefit from shifting supply chains. Some refiners are reportedly bypassing hydroxide altogether, opting instead to dissolve refined cobalt metal directly into cobalt sulfate, a key component for EV batteries.
Beyond the immediate price surge, the DRC’s actions raise deeper questions about the long-term stability of critical mineral supply chains. While the government defends its export controls as a means to align production with global demand and foster domestic processing capacity, analysts warn that the country’s unpredictable policies could deter foreign investment. Trading firm Darton Commodities noted that the combination of restricted exports and continued mining activity is already causing a domestic stockpile of cobalt hydroxide to build up — a situation that could strain producers financially and fuel illicit trade.
For Kinshasa, however, the policy represents a bid for greater control and profit. President Felix Tshisekedi has described the quota system as “a real lever” to influence global cobalt markets, boost state revenues, and improve living conditions for Congolese citizens. Government minutes from an October 3 cabinet meeting warn of “exemplary sanctions” for any company involved in fraud or off-quota trading, including permanent expulsion from the system.
Still, the global implications are profound. With the electric-vehicle boom accelerating, demand for cobalt — one of the most essential battery metals — continues to surge. If Congo’s restrictions persist, and alternative sources fail to fill the gap, the world could soon face a supply crunch that redefines the balance of power in the clean-energy transition. As Bloomberg reports, cobalt’s rally may just be getting started — but the world’s dependence on one nation’s mines has never looked more precarious.
